Correlation Between Pangaea Logistic and Safe Bulkers

Can any of the company-specific risk be diversified away by investing in both Pangaea Logistic and Safe Bulkers at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pangaea Logistic and Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pangaea Logistic and Safe Bulkers, you can compare the effects of market volatilities on Pangaea Logistic and Safe Bulkers and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pangaea Logistic with a short position of Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pangaea Logistic and Safe Bulkers.

Diversification Opportunities for Pangaea Logistic and Safe Bulkers

-0.32

Correlation Coefficient

Pangaea Logistic  Safe Bulkers

Very good diversification

The 3 months correlation between Pangaea and Safe is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pangaea Logistic and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers and Pangaea Logistic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pangaea Logistic are associated (or correlated) with Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Pangaea Logistic i.e., Pangaea Logistic and Safe Bulkers go up and down completely randomly.

Pair Corralation between Pangaea Logistic and Safe Bulkers

Given the investment horizon of 90 days Pangaea Logistic is expected to under-perform the Safe Bulkers. In addition to that, Pangaea Logistic is 1.2 times more volatile than Safe Bulkers. It trades about -0.01 of its total potential returns per unit of risk. Safe Bulkers is currently generating about 0.08 per unit of volatility. If you would invest  343.00  in Safe Bulkers on December 28, 2024 and sell it today you would earn a total of  33.00  from holding Safe Bulkers or generate 9.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pangaea Logistic  vs.  Safe Bulkers

Pangaea Logistic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pangaea Logistic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Pangaea Logistic is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Safe Bulkers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Bulkers are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Safe Bulkers may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Pangaea Logistic and Safe Bulkers

The main advantage of trading using opposite Pangaea Logistic and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pangaea Logistic position performs unexpectedly, Safe Bulkers can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.

The idea behind Pangaea Logistic and Safe Bulkers pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.